Krista (7:08)

Okay, let's go to questions.

Clark Howard (7:11)

I'm not at all excited about watching football.

Krista (7:14)

No, not at all. Well, I wouldn't mind watching some of my Christmas movies on a giant screen. Screen. My screen's big enough. I have a big TV. Mine's like 65 inches.

Clark Howard (7:22)

So a bit of trivia about me as you know, but a lot of listeners and viewers don't know. I got my master's degree from Central Michigan University. And the Mid America Conference has this deal where their schools play games on Tuesday nights. And so I've been through the fall, I've been watching on the four box, but there's only three games, watching the six Mid America Conference teams play. And it's funny how, except for the biggest schools, that football has become a TV event, not a stadium event. Because when you see a punt, you see there's like nobody in the stands. It's like, it seems like there's fewer people in the stands for these Tuesday night games. Then go to a high school game in Texas, you know, where high school football is the religion. And it, it's funny how the TVs and the, you know, the TV money has completely changed how you think about football. Whoever thought there'd be football on Tuesday nights, Right.

Krista (8:30)

Americans clearly can't get enough. And you certainly are one of one of those. Aaron in Minnesota wrote in. He said, my family made a goal of downsizing this year. We sold a lot of items on ebay and Facebook MarketPL. Both of these companies will be sending me a 1099 for our 2024 sales activity. Most of these items will have been sold at a loss, but we do not have purchase receipts anymore to prove it. Are there any best practices for us to use in order to lessen the potential tax exposure for this? Since we're not making a profit, I'd hate to have to pay tax on these sales.

Clark Howard (9:02)

Okay, so there's so many people that sell personal items on ebay or through Facebook Marketplace or whatever, but they're selling enough stuff that they're going to generate enough potentially to get a 1099 and the IRS recognizes that if you're not running this as a business and their personal possessions, there's a procedure where you come up with your best guesstimate of what the value of each item is. And you have like, okay, so I sold this as best I can remember. This kind of thing cost blah, blah, blah when I bought it. And you can demonstrate to them that you can offset the 1099 with the costs you had on the items and report no income from those. The IRS has a publication that's not that hard to weed your way through. If I remember right, it's 551 that we were talking about this before when people were freaking out about all these 1099 and you will not have to pay tax. And of the things you're going to get, you're going to be a potential target for any kind of audit. This is not it. When it involves a very low dollar amount. If you're reporting getting a 1099 that reports, let's say, tens of thousands of dollars of revenue, then there's going to be more scrutiny on you. But if it's just enough that you might have generated a 1099 and you keep whatever records you can generate, you should absolutely be fine.

Krista (10:36)

Okay. Marie in Kansas says, I'm curious what you think of ESAs or certificate online companies sell in order for folks with anxiety, depression or other medical needs that allow them to take their pet into normally fee based places such as apartments or hotels.

Clark Howard (10:52)

So what we used to call support animals is emotional support animals. Emotional support animals? Yeah.

Krista (10:56)

Is there a way to do this without paying their 99 fee? I realize this can be abused. I'm just curious for those who indeed would be aided.

Clark Howard (11:05)

Okay, so Marie. Okay. There's a lot of controversy about the support animals because a lot of people were faking it and they were just going on ebay or Amazon or wherever and they were buying a thing that they'd put on their dog that said they were an emotional support animal so they wouldn't have to pay the rip off airline fee or if a hotel has a junk fee, they wouldn't have to pay it and maybe be able to take their dog into a restaurant or store. You know, you see on a lot of businesses, you know, pets not allowed except emotional support animals. They'll have a sign at the door. So people were buying these things and doing the fake out. So that led to new rules. Some states even have a thing that has chapter and verse what's required in terms of therapy sessions, which are for the Human, not the animal.

Krista (12:02)

Right?

Sponsor (12:03)

Yeah.

Clark Howard (12:03)

So you have to have therapy sessions with a licensed therapist and then they issue a letter to you. And now online you can buy these letters like you're talking about. And some places will honor those letters you buy online, others will not. So whatever I would say what you default to since you live in Kansas, see if there is a specific statute in Kansas that states what is a valid emotional support animal certificate in the state of Kansas and that if you meet those requirements, that should be enough for wherever you travel in the United States.

Krista (12:43)

Right. And just get it from a professional instead of paying one of these sites. Wayne in New York says, I have a Roth 401k through work. Can I have another Roth IRA through E trade? And if so, can I contribute up to the max to each one per year?

Clark Howard (12:56)

Yeah, unless you're making a ton of money. The exclusion is 200 and something,025 some number way up there that you have to make in order to not be allowed to do Both the Roth 401K at work and the Roth IRA on your own. As long as you're below those income limits and you looking for the exact ones for me, Chris? Okay, so as long as you're not violating the income limit, you're free to do both and put in the max on each. And that's phenomenal if you're in a position to do it. People who consistently put in the max into a workplace 401k end up almost with certainty with enough years of depositing money will end up what Fidelity Investments calls a 401k millionaire. And so let's see if you're a single Filer up to 165 grand if you're married. Right. About a quarter million. So adjusted for 46.

Krista (14:10)

Yep.

Clark Howard (14:10)

Yeah. So unless you're earning the big bucks, those are good problems to have. But if you're earning less than that, yes, please do the max in both and it's just going to work out great for you. Speaking of the workplace, I have biases. Don't we all? We have biases, we have prejudices. And I believe so much in what makes a difference in how successful a company will be, how profitable it will be. And it has to do with something very basic that an owner has to think about that changes their relationship with their employees and then in turn changes the success of their business. And I want to share one of those things I believe in so much. Straight ahead.

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Clark Howard (17:49)

Through my core that bosses that treat their workers like dirt will end up with workers who treat the customers like dirt. That it is a direct if then relationship. You can always have a bad hire who's got a bad attitude who's going to be giving a bad customer experience. But I believe that you change things when you treat your employees really, really well. And you're probably saying big duh. But it's not platitudes. It's not just having mission statements that say our people are our most important resource. No, you got to show it. You got to show it in how you treat people. And something that I believe is an enlightened self interest. See, I love the free market. I love the free enterprise system. I love capitalism. I know that those three things are not that popular in America right now because a lot of corporations have forgotten the real element that really matters and that's how you treat your people. And companies that really show their employees that they benefit from the company's success, I believe over time tend to do much better as a company grow market share and grow profits. Months ago, I told you the story about how tiny regional supermarket chain Publix is more profitable than giant Kroger. That is, you know, that uses like 35 names around the country. Kroger is second largest supermarket chain in the country behind Walmart. And Kroger just makes piddly profits. Publix makes huge profits with not that many stores and only in a corner of the eastern part of the United States. Who owns Publix? The employees own Publix. The founding family owns a little part. All the rest is owned by the employees. And if you ever are in, they dominate Florida. If you're ever down in Florida and you've never experienced Publix go in, one odds are you're going to have an experience that is better than you're used to in a supermarket. I believe small businesses, large businesses and in between benefit by having direct, measurable rewards for their employees. My company, and going all the way back to when I was in the travel agency business, I used to give my employees into the year a quarter of the company's profits. And that's something I've done with companies I've had through my lifetime, including today, where a portion of the company's profits go to my employees and they act and think like owners. In big companies, it's a lot easier to have employees own actual stock and see a direct benefit from their efforts. But you think about why does an owner bust his or her rear end to make a business successful? Because the reward is there with potentially profits at the end of each year or growth of that enterprise that creates wealth. This is the same idea. I don't know if I mentioned when the late Bernie Marcus, one of the founders of Home Depot, died recently that one of his principles when he and two other men started Home Depot was that the employees should have a stake in the game. And a lot of people who just work the aisles in a Home Depot who started early became millionaires just from the stock they received. I think it's in the thousands. So ownership is key. And remember that concept, enlightened self interest. A lot of owners of businesses look at it as a zero sum game. You know, a dollar that I give to that employee is a dollar I don't have anymore. But that's not the whole principle of how enlightened self interest operates. An employee who feels rewarded and feels valued is going to put in more hustle, put in more effort, then ultimately what does that do? That falls directly to the bottom line with more profit.

Krista (22:24)

All right, we'll go to questions now. This one's from Dave in California. Two Teslas, the Model Y and Model S make the most dangerous cars list despite Tesla's advanced driver assist technology. Could Clark comment on these findings if he hasn't done so already?

Clark Howard (22:39)

Oh, I have commented on in the past, Dave. Tesla shows in the stats per mile traveled to be the most dangerous vehicle on the road. And it has all kinds of advanced safety systems on it. It has very effective automatic emergency braking as I experienced recently on a freeway where it threw me so far forward when it did emergency braking, I didn't realize traffic was stopped in front of me and I was driving instead of being on, on it driving with autopilot or full self driving. The reason I believe is the drivers that people who have a excitement with speed. Teslas are so powerful, they are so fast, they are so quick that I think they tend to attract a driver who is very, very aggressive. I've said that The Tesla Model 3 drivers are the replacement for the BMW Model 3 drivers who used to be considered to be the most kamikaze drivers on the road. And so, Dave, I think the enemy is the person you see in the mirror if you're a Tesla driver is that they are so incredibly, I mean they're an adrenaline rush car.

Krista (24:03)

And so it's not that it's not a safety rating. It's dangerous because there are more deaths per.

Clark Howard (24:09)

Right, right. The car itself. You know, on all the safety ratings and all that, the Teslas get absolutely great safety ratings. And then you see the death statistics per miles traveled and Tesla's off the charts. I think it's, you know, I drive a Tesla, Krista drives a Tesla. You Push that pedal. It's like you're in a space vehicle, it goes so fast. So I think that's the problem is that the driver behavior with the amount of horses under the hood.

Krista (24:40)

Okay, Joe in South Carolina, how many.

Clark Howard (24:42)

Tickets have you gotten since you got yours?

Krista (24:44)

Zero.

Clark Howard (24:45)

Okay. That makes you an unusual Tesla driver.

Krista (24:48)

Well, you know, I probably have something to do with age too. Like, don't you think as you mature, you really don't take risks like that anymore? It's crazy, at least for me. Okay, Joey in South Carolina says, I have a car loan in my name, but my roommate actually makes the payments and it's her car. Basically. Her credit wasn't good enough at the time, so I simply put it in my name. Would it help her to add her name to the loan to build up her credit score? And will banks actually add someone onto a loan? She has a 609 credit score and I thought if she were actually on the loan for several months, it may boost her rating some or at least now it would show a history of actually making the payment since none of the payments can be counted because she wasn't on, she's not on the loan.

Clark Howard (25:29)

So, Joey, this is very kind and thoughtful on your part. And you can neither add nor delete someone from an auto loan. The auto loan is a contract that from when it was originated, it was a contract with you. So the only way you could do it is with a refiing of that car loan and both of you being on it at that point. But that would only make sense if you refi it into a shorter term loan that would match or be even shorter than what you have now and that the interest rate would be the same or lower than you have now. And if you're really trying to help her get that 609 up, the easiest, most direct path to do that is with a credit card. You have add her as an authorized user. Don't give her the plastic, but add her as an authorized user reporting her credit, her Social Security number with that application that will be reported through to the bureau. And your on time payments with a credit card will benefit her. Because unless you have an opportunity to improve the condition of that loan by doing a refi, you're just going through a lot of work to try to accomplish what you're trying to do. That's so easily done, adding someone as an authorized user.

Krista (26:51)

Okay, but there is some danger in all of this for anyone who's thinking of doing it. Right?

Clark Howard (26:56)

Well, okay, so I didn't even get into that. So, Joey, what you did is very kind, but you're taking on risk in your own life because if your roommate, if. If y'all had a falling out with each other, you have problems with that and you're paying for a vehicle for someone who you're not even friends with anymore and things like that, that gets.

Krista (27:17)

Or they're just unable to make payments or.

Clark Howard (27:20)

Yeah, it can get messy so many different ways. Because Joey wasn't asking me if he should have done it.

Krista (27:26)

You know, others listening who might be thinking of doing it. I think, you know, his situation may be very different. I just, you know. Okay. Laura in Georgia says one of my children creates content on TikTok. She has a lot of followers and would like to start monetizing her content. I'm very leery, however, because TikTok asks for your Social Security number so that your earnings could be reported to the irs. This makes me very nervous. Do you think it's safe to put your Social Security number in, or should we create some sort of LLC for this purpose and get an ein and use that instead?

Clark Howard (27:56)

So, Laura, at this point, it would be overkill to set up the llc. I think it's fine to provide the Social Security number. There's a legitimate business reason for supplying a Social Security number. Tracking for tax purposes. And if there's an opportunity with a meaningful following to start generating revenue from a TikTok presence, you go for it. There are a lot of quote unquote influencers on TikTok that are making money on it. Very small number earning big money. But there is money to be made on this platform if you develop a good following. And it's well worth the risk to go ahead and put in that Social Security number and have the opportunity for your child to earn some serious money. And think about this. If she is earning decent money, she can then have a Roth ira, I'm guessing, as a teenager and start building up money. Money put aside in a Roth as a teenager leads to enormous wealth way down the road. And so this is an opportunity knocking for your child. I think it's great. So thank you so much for joining us on today's podcast. I hope you enjoyed it. And if you need additional advice or you need information, you need guidance. That's a free service. We offer 30 hours each week where you can have one on one and guidance from one of our Team Clark Consumer Action center members. All you got to do is go to clark.com cac and you'll see how to connect to get that one on one advice and everything we're about from our websites, our social media, our newsletters, what I do on TV and radio, know that everything we're about is you. Learning ways to save more, spend less and avoid getting ripped off. See you tomorrow.